All Forum Posts by: Michael Seeker

Want to make it 1,001?? I've been having a hard time locating a good local accountant with RE experience.

Thanks for the input John!

This is good to know, had you guys not chimed in I surely would have found this one out the hard way down the road.

Thanks again for the info Steven, I'm getting much more out of this thread than I was expecting!

You said I have to issue a 1099-MISC if I pay anybody over $600, does this include contractors that run their own contracting business (such as painters, landscapers, etc) or would the contract I sign with them be enough to cover my butt?

Thanks for the advice Will, I had never thought of filing my own lien but it's a great idea! I just wish there wasn't a cap at $50k on the loans, I'm not anywhere near that amount currently, so it doesn't matter, but this info may help me with future planning.

It sounds to me like you have 3 options.

1) Stay put
2) Move and rent your current prop
3) Move and sell your current prop

We'll throw out option 1 since you obviously want to move! Without doing a ton of analysis, why would you want to deal with tenants, vacancies, repairs, cleaning etc. for years to come just to "maybe break even" on the rent?

If you don't like the house and it's in tip top shape, why not just sell it and move on to a new one in a better part of town?

If it won't cash flow as a rental and you don't want it as a residence then what good is it to hold on to?

It sounds quite strange that somebody would try to negotiate rent before even seeing the house. If they are very familiar with the area, then maybe they already know/feel like it is in a good enough neighborhood that they don't need to see it.

If I were you I would post pictures of the property and repost the listing to see what kind of interest you get. With around a month to go before you need to rent it, it sounds like you haven't put forth the full effort to find a tenant.

If the guy seems legit, I would simply tell him that you would be fine writing up a lease at your listed rent right now, otherwise you will continue to market it for the next month or month and a half and you MIGHT come down a little bit on the rent if you can't find somebody willing to pay the full amount.

I would be careful as there usually isn't as much demand for higher end rentals in a new construction area.

Steven,

Thanks for the advice!

The LLC will be used to hold a rental property I will be purchasing in early 2012, along with one or two others as I acquire more.

How will this affect the way I should file for 2011?

-Mike

I have my 401k through Schwaab and they allow me to borrow up to 50% of the account value. I believe the origination fee is $135 or $165 and I'm required to pay the loan back through an auto-deduction from my paycheck at 4% interest.

The nice thing about this loan is that the 4% is going right back into my 401k, not to some bank, so as I pay it back I can also borrow against the interest that I've paid myself in the future.

On a semi-related note, I wonder how many people look at the fees that they get charged by having their money in a retirement fund. I was poking around looking at the different funds available the other day and noticed that if I were to invest my retirement funds in my own company's stock, I'd get charged about 3/4 of a percent. The reasoning was to maintain active trading and liquidity standards...blah blah blah.

On top of that, the "fund" is only 96% invested in my company (4% liquid), so if my company's stock goes up $1.00 I will only see about $0.95.

I'd say I fall into this category. I started working for "the man" a few years ago, right after the crash of the market. I've been building up my 401K pretty nicely over the past 2-3 years. I've taken out 2 loans against it in the past few months strictly for RE investment.

I won't stop contributing because my company match is essentially a 50% return now that I'm fully vested, but I have every intention of maxing out the loans every 6-12 months until I no longer need my employer's services (aka a paycheck).

Regardless of whether you agree with this article or not, I think it's fair to say that the stock market has been insanely volatile over the past 3-4 years. I feel much more comfortable plopping my money down on a roulette table, at least you know the odds and potential outcomes.

Until the market goes back to the good ol' days where stock prices were based on the underlying fundamentals of the particular company, it seems like a waste of time and capital to me.

Why not put your money into something that you can influence the performance of?

I like knowing I can go into a house and remodel, update, etc. to improve the value and performance (rent). If stock ownership allowed you to fire the morons running the company or the "dead weight" I'd be much more interested in it :D

Thanks for the advice guys, I guess it is time to search the area for a competent accountant with RE experience!

In KY, it cost me about $40. That was a bit lower than what I expected, but the real kicker were the time costs. I expected it to be a lengthy, multi-day process. I took care of it in an hour or two online (possibly while at work :cool: ).

In my haste I did not put together an operating agreement though. I did not realize this was something that would be necessary for me since I am the sole owner/operator of the LLC. After poking around here though I determined that I do need one. Just something to keep in mind if/when you do file. I'm looking in to amending or adding an operating agreement to my LLC.